As of June 4, 2025, Rand Capital Corp's estimated intrinsic value ranges from $16.08 to $32.42 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $19.47 | +29.1% |
| Discounted Cash Flow (5Y) | $16.08 | +6.6% |
| Dividend Discount Model (Multi-Stage) | $32.42 | +115.0% |
| Dividend Discount Model (Stable) | $32.01 | +112.3% |
| Earnings Power Value | $18.14 | +20.3% |
Is Rand Capital Corp (RAND) undervalued or overvalued?
With the current market price at $15.08, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Rand Capital Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.65 | 0.77 |
| Cost of equity | 6.9% | 9.2% |
| Cost of debt | 5.1% | 5.1% |
| Tax rate | 6.0% | 28.3% |
| Debt/Equity ratio | 0.01 | 0.01 |
| After-tax WACC | 6.8% | 9.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $16 | $43M | 71.4% |
| 10-Year Growth | $19 | $53M | 54.2% |
| 5-Year EBITDA | $15 | $40M | 69.3% |
| 10-Year EBITDA | $18 | $50M | 51.3% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $4M |
| Discount Rate (WACC) | 9.1% - 6.8% |
| Enterprise Value | $42M - $56M |
| Net Debt | $(5)M |
| Equity Value | $47M - $61M |
| Outstanding Shares | 3M |
| Fair Value | $16 - $20 |
| Selected Fair Value | $18.14 |
| Metric | Value |
|---|---|
| Market Capitalization | $45M |
| Enterprise Value | $40M |
| Trailing P/E | 5.42 |
| Forward P/E | 5.78 |
| Trailing EV/EBITDA | 9.70 |
| Current Dividend Yield | 938.15% |
| Dividend Growth Rate (5Y) | -18.09% |
| Debt-to-Equity Ratio | 0.01 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $5.84 |
| Discounted Cash Flow (5Y) | 25% | $4.02 |
| Dividend Discount Model (Multi-Stage) | 20% | $6.48 |
| Dividend Discount Model (Stable) | 15% | $4.80 |
| Earnings Power Value | 10% | $1.81 |
| Weighted Average | 100% | $22.96 |
Based on our comprehensive valuation analysis, Rand Capital Corp's weighted average intrinsic value is $22.96, which is approximately 52.3% above the current market price of $15.08.
Key investment considerations:
Given these factors, we believe Rand Capital Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.